AMTECH SYSTEMS INC Q1 FY2025 earnings call

• First quarter results exceeded guidance with revenue of $24.4 million and adjusted EBITDA of $1.9 million. Year-over-year adjusted EBITDA increased by $1.8 million.
• Restructuring initiatives have yielded over $8 million in annualized cost savings to date, excluding one-time costs, and expected to generate ~$9 million by end of second fiscal quarter. Adopted semi-fabless model for capital equipment segment to strengthen operating leverage.
• End markets: Muted demand for equipment/consumables in mature node semiconductor production, but strong demand for reflow equipment in leading-edge AI applications.
• Refined business segments: Semiconductor Fabrication Solutions includes PR Hoffman, IDI consumables, Entrepix parts/services, and front-end capital equipment. Thermal Process Solutions focuses on reflow equipment and furnaces.
• Growth initiatives: Expanding recurring revenue streams, broadening footprint with existing customers, unlocking new opportunities, and investing in marketing/application development resources. Expanded team for Semiconductor Fabrication Solutions business.

For the fiscal first quarter, revenue was $24.4 million. The Semiconductor Fabrication Solutions business focuses on driving recurring revenue streams like consumables, parts, and services, aiming for long-term sustainable growth. The Thermal Process Solutions business focuses on reflow equipment for advanced chip packaging and surface-mount assembly, as well as furnaces for power electronic devices. No specific absolute revenue breakdown by segment was given, but the overall revenue contribution is from these two main segments.

• For Q2 ending March 31, 2025, expect revenues in range of $21 million to $23 million with adjusted EBITDA nominally positive.
• Continue to optimize and reduce structural costs to improve results and profitability through market cycles.
• Operating results impacted by order timing, system shipments, logistical challenges, and semiconductor manufacturer financial results. RMB exchange rate changes could affect actual results.

• Changes in technologies used by customers and competitors.
• Volatility in demand for products.
• Changing worldwide political and economic conditions, including trade sanctions.
• Overall market conditions, including equity and credit markets and market acceptance risks.
• Ongoing logistics, supply chain, and labor challenges.
• Capital allocation plans. RMB exchange rate fluctuations.

Q: Congrats on the results. Are there still additional costs that can be taken out of the business and what areas?

A: Kevin, thanks for joining the call. Yes, continuing to work on things. In supply chain management, through better sourcing and supply chain practices, can reduce input costs for equipment. Also looking at footprint utilization to free up space and reduce fixed costs.

Q: Talk about the automotive market, has it gotten better or worse vs 3 months ago?

A: Guidance reflects softness in the automotive segment, particularly in automotive-related equipment. OEMs have mixed views, some say passed bottom, some still weak, assuming things stay soft.

Q: Talk about advanced packaging space and AI edge inference growth?

A: Seeing strengthening in advanced packaging. Customer base includes OSATs for AI data centers. Expect proliferation of hardware for AI on the edge to drive volume and advanced packaging equipment demand. Players are successful in the industry.